Tuesday, November 18, 2008

Fannie Mae Ga-Ga For Golf

After being bailed out by federal regulators and recapitalized with taxpayer dollars, Fannie Mae launched a $6,000 golf outing. Maybe not as offensive in cost as AIG's luxury getaway (which included over $20,000 in spa charges alone), Fannie Mae's may be more offensive in principle because -- with only 20 attendees of which several were Fannie Mae execs -- it's much less plausibly a training or marketing opportunity.

It's just a bit of fun on your nickel.

Okay, so it was a lousy six grand. But it adds up. And there's the principle of the thing.

It's not a new problem, it's just a problem previously never of much concern: jobs holding others' money tend to attract folks inclined to treat it as their own. You see it in the public sphere (such as in Congress, where Clinton's aides referred to earmark legislation as a privilege which she used effectively for her constituents, which leads one to wonder who she thinks her "constituents" are) as easily as in the private sphere. It's a classic agency problem. The kind of immunity to oversight with which we've inoculated our top agents seems to prevent them from having their interests aligned with those of the public (for organizations like Congress when they decide how to use money taxed from strangers) or the shareholders (for corporations whose managers aren't the owners).

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